chapter 5 b2b strategies: from electronic data interchange to electronic commerce computer- enabled...
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CHAPTER 5
B2BStrategies: From Electronic Data
Interchange to Electronic Commerce
Computer- enabled Inter-firm Commerce
B2B Business ModelNet Marketplace (also called a Hub)
Value Proposition - Electronic marketplace where suppliers and commercial purchasers can conduct transactions.
Revenue Models – Transaction Fees, Subscription Fees, Service Fees, Licensing, Advertising, Sale of Data and Information.
May be a general (horizontal marketplace) or specialized (vertical marketplace)
B2B Business ModelPrivate Industrial Network (PIN)
An extension of a Net Marketplace where suppliers become exclusive vendors.
Benefits of B2B Commerce• Lower administrative costs
• Lower search costs for buyers
• Reduced inventory costs by increasing competition among suppliers and reducing inventory carried
• Lower transaction costs by eliminating paperwork, automation
• Increased production flexibility by ensuring Just-In-Time (JIT) parts delivery
• Improved quality of products by increasing cooperation among buyers and sellers
• Decreased product cycle time by sharing of designs and production schedules
• Increased opportunities for collaborating with suppliers and distributors
• Supply Chain - The series of transactions that links sets of firms that do business with each other. It includes not only the firms themselves but the relationship among them.
• Supply Chain Management - Refers to the activities that firms and industries use to coordinate the key players in their procurement process.
• Supply Chain Management Systems - Applications used to coordinate and link the activities of all the players in the procurement process. (Web based = e-procurement)
• Logistics – The control and management of material from source to destination.
Supply Chain Management (SCM)
Procurement Process
Electronic Data Interchange (EDI)
• EDI is the computer-to-computer transfer of business information between two businesses.
• Most B2B electronic commerce is an adaptation of EDI or based on EDI principles.
• Traditional EDI used costly Private Networks.
• Web-based EDI is made possible by XML.
Private Stores
Company Owned B2B Website
Independent Industry Marketplaces
Independent 3rd-Party Marketplace & Collaboration
Consortia-Sponsored Marketplaces
Industry-Specific Integration & Collaboration
Private Company Marketplaces
Gain Access to Established Retailers & Distributors
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